Chief Justice Warren E. Burger: Number 395 United States against Seckinger.

Mr. Springer, you may proceed whenever you're ready.

Mr. James Van R. Springer: Mr. Chief Justice, may it please the Court.

The question in this case is the meaning of a standard clause in Federal Government construction contracts which provides in pertinent part as follows.

The contractor, the construction contractor, shall be responsible for all damages to persons or property that occur as a result of his fault or negligence in connection with the prosecution of the work.

The Court of Appeals for the Firth Circuit has upheld the dismissal of the Government's complaint for indemnity under this clause.

Holding what this responsibility clause makes -- leaves the United States solely liable for any injuries that arise from concurrent negligence on both part of both the United States and the contractor.

In other words, the Fifth Circuit has read this clause is relieving the contractor of any obligation to indemnify the United States unless the contractor's negligence in the sole and exclusive cause of injury.

Unknown Speaker: It might even stand, that the clause doesn't say anything about in indemnifying anybody?

Mr. James Van R. Springer: Though if its -- it is the Fifth Circuit did treat it in general as an indemnity clause same would operate as an indemnity clause, if an only if the contractor with the sole cause of the injury.

Justice Potter Stewart: Well, it could be argued --

Mr. James Van R. Springer: It's true that the clause does say responsible not -- it doesn't use the word indemnifying.

Now, I will pursue that point a bit further on.

As I say, we submit that this was wrong and that the responsibility clause must be read as shifting to the contractor as its words say and specifically under the facts in this case, full responsibility to pay all of the damages caused by its negligence regardless of the fact that the United States may also have been negligent.

Certainly, we believe it was improper for the courts below to dispose of this case on the pleadings without a trial in which the various pertinent facts relating to the contractor relationship between the parties and the facts of the accident itself could be explored.

The basic facts are as follows.

The Seckinger Company had a fixed price construction contract with the Navy Department in an amount of roughly $650,000.00 for the construction of outside steam pipes of the Paris Island Marine Depot in South Carolina.

Ernest Branham was an employee of Seckinger who has a welder and steamfitter.

On the day of the accident, Branham was working on a steam transmission plate that is being installed above ground across one of the streets at the base at a height of about 16 feet above the street.

A day or two before, the stretch of pipe crossing the street had been put in place on its supports by a crane.

But on the day of the accident, Branham and another worker were making certain adjustments in the positioning of the pipe in preparation for welding into the pieces of pipe on either side of the street to which at least to be connected.

Branham was working shortly before the accident on one side of the street and other man was working on the other side.

The construction foreman in charge of job, who was of course an employee of Seckinger, noticed that the man on the other side was having some difficulty and he directed Branham, the employee, to go over and help him.

In order to get there, Branham did not climb down to the street and walk across the street, but instead walked across the pipe itself which was about 20 inches in diameters.

And as he came near to the place where the other man was working, where he was to help him, he bumped into an uninsulated power line which was running -- which was strung along poles the normal way running parallel with the street at the edge of the -- at the sides.

Chief Justice Warren E. Burger: By whom --

Mr. James Van R. Springer: (Inaudible)

Chief Justice Warren E. Burger: By whom has that power line been strung?

Mr. James Van R. Springer: That was a Government-owned power line which one of the regular lines which provided power into the base.

I believe it was undisputed in that trial that this power system covered about a third of the whole base.

The pipe -- the wire was about four or five feet above the top of the pipe and as I say when Branham got to the other side where he was going, he bumped into the pipe and the shock knocked him off the pipe and he fell to the street which was 16 or 17 feet below and he was of course seriously injured.

Branham collected workmen's compensation from Seckinger under state law and also being unable to collect anything more from his employer, he sued the United States under the Federal Tort Claims Act and the District Court for the Eastern District of South Carolina.

After a trial, that Court found that the accident had been caused by negligence on the part of the Government and awarded Branham damages in the amount of $45,000.00.

Specifically, the Court in that case found that the United States had been negligent in two respects. One or the other of which had found it caused the accident.

First, it found that Government's construction inspector who was in general supervision of the job was negligent in failing to have the law -- the power line de-energized before Branham was sent to by the foreman to work near.

And secondly, the Court found that the same inspector had negligently failed to warn Branham of the danger of the wire.

The United States in that action in South Carolina filed the third party complaint against Seckinger in which it sought indemnity under the responsibility clause that are referred to saying that any injury to Branham was caused by Seckinger.

The contractor's own negligence and therefore the United States should not bear the damages.

The South Carolina District Court dismissed that third party complaint without prejudice on the theory that trying it in that case would unduly complicate the proceedings there.

So accordingly, the United States had to bring and did bring a separate action, this case against Seckinger.

It was unable to sue Seckinger in connection with this case in South Carolina, so the case comes here from Southern District of Georgia to the Fifth Circuit.

The Government's complaint in the indemnity suit like the third party complaint that had been dismissed alleged that Branham's injuries were caused the negligence of Seckinger's employees.

In particular, tracking the findings of the South Carolina District Court which had held the Government liable the complaint alleged as follows as to the failure to de-energize the power line, the complaint alleged that Seckinger, the contractor, was responsible for requesting that the power be turned off before it sent Branham to work near the wires or else that Seckinger should have either put some insulation on the wire itself or requested the Government to do so.

And as to the second element of negligence to the South Carolina District Court had found, the complaint alleged that Seckinger should not have directed Branham to work near the wires and should have prevented him from proceeding in a dangerous manner.

Justice John M. Harlan: How much was awarded -- Branham get?

Mr. James Van R. Springer: $45,000.00, Mr. Justice Harlan.

Therefore, this complaint alleged Seckinger's negligence was the cause of the injuries to Branham and the contractor responsibility clause made Seckinger solely liable for them and therefore Seckinger should indemnify the United States for the damages that were paid.

The Government was prepared to prove these allegations of course of the trial, although it never had the chance to.

It was prepared to prove not only that Seckinger was negligent and that that negligence caused the accident, but also that the circumstances were such that Seckinger was primarily negligent and the Government only secondarily so.

If -- as the South Carolina Court had held, the Government should have turned the power off.

The relationship between the parties was such that the Government could rely on Seckinger, the contractor, to inform you when it was necessary to turn the power off.

In this regard, the Government would show that Seckinger had a full-time foreman on the job at the time of the accident as the contract required, whereas the Government's inspector who was charged only with inspection of the performance under the contract was concerned with not only with this job but with another number of other jobs going on at the same time and in fact it was not present at the site of this job when the accident occurred, but was somewhere else supervising another job.

As to the Government's breach of its duty to warn Branham that the South Carolina District Court have found, the Government would further have relied, have been able to have a trial on its indemnity claim on the specific instructions that were given Sekinger in the contract to assure safety and the specific --

Justice William J. Brennan: May I ask you Mr. Springer, the only question before us, one of them, the scope of the clause from which Sekinger bound themselves to be responsible for total damages that occurs was about his total negligence.

Mr. James Van R. Springer: Yes, yes Mr. Justice Brennan, yes.

I thought it might be helpful to --

Justice William J. Brennan: Yes, I understand that.

Mr. James Van R. Springer: To give some flavor of --

Justice William J. Brennan: That's the only -- that's the only, so it's nothing but a contract – construction with contract clause that's before us?

Mr. James Van R. Springer: Yes.

Justice Byron R. White: Well, the Court of Appeals said that it would never cover a case by the Government's negligence.

Mr. James Van R. Springer: Yes, that's correct, Mr. Justice White.

Justice Byron R. White: Which renders at the meeting.

Mr. James Van R. Springer: Pardon?

Justice Byron R. White: Which renders at the meeting.

Mr. James Van R. Springer: That is our position, yes.

Justice Byron R. White: (Voice Overlap)

Mr. James Van R. Springer: Yes, because the Government cannot be liable under the Tort Claims Act unless either one of its agents is negligent and in fact there's no authority under that act for the Government even to settle the case, unless the person who authorizes the settlement believes that the Government was negligent.

And I suppose if a non-negligent Government settled the case and then sued for indemnity under the interpretation of the Fifth Circuit has given to this clause, the person's suit can then say the settlement was improper because the Government official had no authority to settle the case and therefore there's no --

Justice William J. Brennan: To bring as this as a standard clause?

Mr. James Van R. Springer: Yes, this is in fact has been standard at least since the late 1930s.

This clause is now prescribed actually in two places in the Armed Services Procurement Regulations which are issued by the defense department and also in the General Service Agency Administrations Regulations which govern, generally speaking, all Government contracts.

The -- there's an section, they both use the same clause though under separate change of authority.

Justice William J. Brennan: If the Court of Appeals is sustained by us and this clause be rewritten so as to inspect the Government under future contracts?

In fact these clauses are written, I'm told by an interagency committee with a good deal of consultation with the industry.

So that -- although they're prescribed, there is some of the flavor of contract negotiation that goes into formulating these provisions since the industry is consulting and has an opportunity to participate.

Unknown Speaker: (Voice Overlap) what would -- (Inaudible).

Mr. James Van R. Springer: I would say that's all you'd have to do.

I think I could certainly draft a more ironclad, inexorable indemnity clause for one thing you could not use the word indemnity.

You could say, but it provides all at the end that this clause means what it says even if the Government itself is negligent but we will submit that that is not necessary.

And as to your initial question Mr. Justice Brennan, if the clause could be changed but of course it's not that simple of a matter of some person decreeing that it would be better to have it though, it's obviously as these are the complicated bureaucratic process.

Chief Justice Warren E. Burger: Isn't there some suggestion as to the number of contracts that are now extents with this clause?

Mr. James Van R. Springer: I don't have figures on the number of actual contracts Mr. Chief Justice.

Chief Justice Warren E. Burger: Well, I thought that some figures --

Mr. James Van R. Springer: I've been told and we say in our petition that there are some 200 cases pending --

That many --

Chief Justice Warren E. Burger: But it also said many thousands of contracts.

Mr. James Van R. Springer: Oh, I'm sure, it certainly would be many thousands since this covers all fixed price construction contracts that the Government are virtually all that the Government whether with the Defense Department or the rest of the Government is into.

Mr. James Van R. Springer: Well, they are in the District Courts and in fact this is the only, so far as I'm aware and I'm told, the only case that's gotten to the Court of Appeals on this specific issue.

Justice Potter Stewart: And now the 200 in the District Courts now?

Mr. James Van R. Springer: There have been a fair number of decisions one way or the other most of them unreported --

Unknown Speaker: I see.

Mr. James Van R. Springer: -- in the District Court.

Unknown Speaker: And prior to the decision in this case, what had been the -- what have been the faith of this clause in cases such as this arising in the District Court?

Do you say this clause has been in Government contracts since the 30's, I should think it would be a great deal --

Mr. James Van R. Springer: It has happened --

Unknown Speaker: --law one way or the other?

Mr. James Van R. Springer: I have to say that this clause is not until -- at least until the 60's, been used by the Government generally speaking as an indemnity clause.

I think one is probably that that may seem strange, but I think probably, the simplest explanation for that is that it was not until relatively recent years that employees who were barred from suing their employers on Government contracts thought up the notion of suing the Government on the theory that the Government was negligent and was a handy third party.

Unknown Speaker: The Federal Tort Claims Act goes back to the --- about 1947.

Mr. James Van R. Springer: 1946.

Unknown Speaker: 1946, 1947 between those years?

Mr. James Van R. Springer: Yes.

Justice Hugo L. Black: Did I understand you to guess, this problem might be eliminated by simply putting it after the clause referring to your statement that this clause mean what it says?

Mr. James Van R. Springer: That certainly could be done Mr. Justice Black.

Of course that could be done in any contract case as well.

Justice Hugo L. Black: You think that would set, what did you say?

It still had to construe what it meant, would it?

Mr. James Van R. Springer: It -- well, I think you'd say in other language you would say -- as I would say an argument, you would but the various different means --

The Fifth Circuit, of course, treated this clause and we think erroneously as an insurance clause.

It thought that the Government was basing its case on the proposition that this clause entitled the Government to indemnification from a contractor even if the contractor was utterly innocent of any negligence.

Of course, that's not the theory of our case.

The theory of our case and the allegations of our complaint are that the Seckinger Company was negligent, that its negligence cause the accident and that therefore and only therefore, the Seckinger Company is obligated to bear as the clause says the responsibility for its own negligence.

Justice Hugo L. Black: Are you asking a construction that would hold that, perhaps both parties are negligent or the Government which should not be alarmed or are you asking for more limited holding?

And that both parties are negligent though we have -- the question is whether both parties are negligent but the Government shown not to be and the contract has shown that had been defined though, that he alone should be liable, which are you arguing?

Mr. James Van R. Springer: Well, I hope if I can sir, as I said in answer to Mr. Justice White's question, if the Government is not negligent, this case couldn't arise because the Government is subject to liability if itself is not negligent.

So that we are necessarily in the situation where both the Government and the contractor are negligent.

Justice Hugo L. Black: And then what do you ask?

Mr. James Van R. Springer: We say that in any such case that the meaning of this clause is that the contractor shall bear the full damages.

Justice Hugo L. Black: Full damages.

Mr. James Van R. Springer: Those and we don't think that if proposition is rejected that we are out of court in this case, we think it's perhaps a less sweeping rule, you could say that at least there shall be some allocation of liability between the contractor and the Government.

And of course that's common place at least where this disparate responsibility in the common law itself are negligent --

Justice Hugo L. Black: I guess if that were adopted the easiest way to work it in Court would be to be say that each of the equal alarm without having to go through weeks of evidence to find out which was the most liable, which was the most negligent.

Mr. James Van R. Springer: Well, that -- that would be a possible role, of course, there is a growing body of authority on comparative negligence where the finder of fact does in fact allocate the responsibility.

And of course there is the more traditional rule that where one party is primarily negligent and the other is only secondarily, so which is really on the facts of this case as the theory of the Government.

Justice Hugo L. Black: I assume one of the easy -- one the easiest ways might be for the Government to get a better contract.

Mr. James Van R. Springer: That's certainly true, Mr. Justice Black, though as, of course that could be said and as I suggested in any contract case that if you had drafted it better you would have a lawsuit though you answer that proposition --

Justice Hugo L. Black: The Government continued to make the contract and then they change it in any sense --

Mr. James Van R. Springer: No, it has not been changed so there are factors there.

I gather constantly, there are revisions of these clauses under consideration and the Department of Justice at least has made a suggestion that we could avoid these cases by more explicit language.

That may or may not be so.

Justice Potter Stewart: Because this employer, the law allocates the responsibility, the law of South Carolina, North Carolina?

Mr. James Van R. Springer: South Carolina.

Justice Potter Stewart: The South Carolina as I suppose like every other state, though I don't know anything about this, makes these employer liable whether or not he was negligent to the employee under some form --

Justice Potter Stewart: I know that has been paid and that liability has been discharged by the employer in this case, is that right?

Mr. James Van R. Springer: Yes.

Though I think -- I think it would be clear that if the United States were otherwise entitled to some kind of indemnity from that he could not set up the South Carolina workman's compensation statute as any kind of defense to his liability to the United States particularly under contract with the Government and perhaps even as a matter of common law indemnity which of course this case does not --

Justice Potter Stewart: That would be a matter of the state law, the common law indemnity.

Mr. James Van R. Springer: Yes.

Justice William J. Brennan: But you don't put this lawsuit as you would here.

Mr. James Van R. Springer: No, certainly Mr. Justice Brennan.

We have to prove negligence and we have to prove causation and perhaps though we think we should not have to prove, we might have to prove the relative response.

Justice William J. Brennan: Do I understand you to suggest that perhaps we exceeded clear and also -- and fully negligence does necessarily mean you'd get a judgment for $45,000.00?

Mr. James Van R. Springer: Well, we would say that the literal language of the contract clause that the contractor shall be responsible for all damages that occur as a result of his negligence.

We would say as our first position that that automatically assure us full recovery if we would think --

Mr. James Van R. Springer: I'm just -- I was suggesting that that would be another view that could be taken.

Justice William J. Brennan: But if you prevail here, you're going after the whole $45,000.00?

Mr. James Van R. Springer: Yes, on first on the theory that the contract gives it to us automatically.

Second, on theory, on the traditional common law indemnity theory that insofar as the United States had a duty to this man it was justified in relying on the contractor to start the particular duties that gave rise in the United States' liability.

Chief Justice Warren E. Burger: Well, I suppose your basic claim of negligence against the contractor is that they put the man where people normally are not supposed to be and take all the burden of that.

Mr. James Van R. Springer: Well, they did that and first the contractor and the contract itself says in one of the clauses that we've set forth in our appendix, that the contractor shall give his personal superintendents to the work or have a confident foreman or superintendent on the work at all times during progress.

It is not -- it was not in fact the situation that any Government agent was on the scene at the time in this accident or was expected to be there.

It's the responsibility of the contractor under the contract to give minute by minute supervision to the work.

Justice William J. Brennan: Like to turn the power off, isn't it?

Mr. James Van R. Springer: The United States could have but I --

Justice William J. Brennan: So did the contractor?

Mr. James Van R. Springer: The contractor -- well, the contractor would have had to ask the Government employee who was in charged of the power situation to turn it off, but that in fact I believe was what have been done a day or two before when the crane was operating, putting this pipe in when it was clear that the crane boom would be within range of the wire as then there was a real danger so that was done.

But basically, our proposition is that common place that the contractor was supervising the work and anything that had to be done either by way of warning or by having the power turned off to protect each man was the contractor's obligation at least as regards to the relationship between the United States and the contractor.

In any event, we think it's clear that some of the responsibility must be borne by the contractor in this clause.

The consequence of the Fifth Circuit's view of it is the United States has to pay the price for the negligence of its contractor.

They've gone so far to protect the contractor from liability to the United States that they have thrown the liability on the United States but denying it any opportunity, whatever the relevance falls maybe to have indemnity.

Chief Justice Warren E. Burger: You're just about out of time Mr. Springer.

If you want to save any for rebuttal

Mr. James Van R. Springer: Yes I would.

I would like to go on for just a minute more.

I noticed I don't have the light.

Chief Justice Warren E. Burger: 11:48, you recorded as being completed out of time.

Mr. James Van R. Springer: Thank you.

I might just review again.

I think there are substantial policy considerations that support what we say to be the meaning of this clause.

As I've suggested, the contractor is the person who was in the best position to prevent injuries of this kind.

Since he's on the job and has direct supervision over his workmen and I would suggest that imposing this kind of responsibility on him for his own negligence gives him a desirable incentive to assure safety as the person is best able to assure it.

And whatever policies there might be in favor of not shifting negligence to an innocent contractor, we suggested that they do not apply here at all where the whole theory of the Government's indemnity claim is that the contractor was negligent and in fact was primarily negligent.

I would like to save the rest of my time for rebuttal.

Chief Justice Warren E. Burger: Mr. Kennedy.

Argument of John G. Kennedy

Mr. John G. Kennedy: May it please the Court.

I suppose all of these did start about in 1956 when our employee got hurt at the Government installation at Paris Island, a Marine base.

He came in contact with a Government wire which served a great deal of the base other than this construction job.

It helped train marines and was not in the province of the contractor that turn on or off.

Chief Justice Warren E. Burger: Would it have been turned off, short time before if the contractor suppressed, wasn't it?

Mr. John G. Kennedy: This is not in the record Mr. Justice and where it comes from is unknown to us.

Now, the Government got hit in the District Court of South Carolina for $45,000.00 and properly looked for someone else to help pay.

They went through the contract, very think, very involved forwards and backwards and finally they found a clause which they thought might be closed.

This clause even had a sneaky title.

It said, permits and responsibilities for work, etcetera.

It never used the word indemnification.

It never used the word whole harmless, it said permanent --

Justice William J. Brennan: Well, does -- does it have to?

Mr. John G. Kennedy: Yes, sir.

Justice William J. Brennan: Alright.

Mr. John G. Kennedy: We respectfully maintain that to doll up this clause and make it one of indemnity, we don't add the words --

Justice William J. Brennan: What's the magic --

Mr. John G. Kennedy: We really --

Justice William J. Brennan: What's the magic in indemnity?

Mr. John G. Kennedy: It's the English language for indemnify.

Chief Justice Warren E. Burger: Well, what did the words say here?

They say that --

Mr. John G. Kennedy: Be responsible.

Chief Justice Warren E. Burger: -- he shall be responsible for all damages that occur as a result of his fault or negligence, that's pretty plain, isn't it?

Mr. John G. Kennedy: Is the way -- it's the way the AIA has done it which might give us some guide.

Justice Byron R. White: Well, I don't understand responsible.

Mr. John G. Kennedy: The responsible is limited, Mr. Justice.

Indemnify means that if I, the Government, gets hit for negligence.

I can then recover from somebody else.

Now, the AIA has recognized this.

Justice Potter Stewart: What is the AIA, the American Institute of Architects?

Mr. John G. Kennedy: Yes, sir.

And this contract is very widely used and they say in their contract that the contract that shall indemnify and hold harmless, the owner, the Government was in the comparable position and the architect and their agents and employees from and against old claims, damages, losses and expenses including attorney's fees arising out of resulting from the performance of the work.

So --

Justice Byron R. White: That is a long, long instance?

Mr. John G. Kennedy: Yes, sir.

And it also uses the word indemnify.

Some of your courts have defined responsible as the ability to respond.

Not “will respond” but “I am able to respond.”

So, the definition of responsible is much more limited, we find that --

Chief Justice Warren E. Burger: Would you think that the word reliable instead of responsible would be different?

Mr. John G. Kennedy: I think Your Honor, if a small amount at that time that was consumed in this case from the Government's standpoint were devoted to writing a clause originally, this case would have never happened.

I personally would use the word indemnify as the AIA has used and countless other contracts used.

They hit the word indemnify.

They think there is magic in the meaning of indemnification.

Justice Hugo L. Black: Suppose that it -- suppose that they didn't used either one of the words, they just chose to state what they wanted.

They said that if any person is in view to the negligence of this contract, he shall make the Government hold or an indemnity hold on it?

Mr. John G. Kennedy: I think we have -- I think we'd have much less argument Mr. Justice with this particular problem.

Justice Hugo L. Black: It hinges around the words, those two words, they're equal.

Mr. John G. Kennedy: Yes, sir.

Yes, sir and the title of the clause where it was found.

Justice Potter Stewart: Mr. Kennedy, I'm -- I understand that this clause has been in hundreds if not thousands if not many, many thousands of Government contracts since the 30s, the Federal Tort Claims Act has been existing since 1946, isn't there, aren't there -- I'm amazed if there are not many, many Court decisions construing this clause in this basic context and are there or are there not?

Mr. John G. Kennedy: I think we share your surprise and I think only lately have they started pushing it.

Now --

Justice Potter Stewart: Well, are there any court decisions, District Courts, Courts of Appeal or state courts?

Mr. John G. Kennedy: In the briefs in the Circuit Courts, you'll find a District Court decision out of Texas which construed this favorably.

The Government says --

Justice Potter Stewart: Favorably to which side?

Mr. John G. Kennedy: To our side.

The Government cites Porello, when they try to get into the Ryan doctrine and leave the narrow question of the interpretation of words and go to implied warranty which also is an issue in this case and Porello had a similar clause although it was much longer.

Now, beyond these two cases neither side had been able to come up with much.

Now, in that context remember this clause was born in its present form in 1938 at a time when indemnity by the United States would have been impossible because there was no Federal Torts Claim Act.

Justice Potter Stewart: You mean, indemnity to the United States?

Mr. John G. Kennedy: Right, because the --

Justice Potter Stewart: But the United States could not have been held liable.

Mr. John G. Kennedy: Exactly, so how in 1950's fall when this contract was drawn.

Can it get added meaning to cover a situation which was not in effect when the present wording of the contract was born?

Chief Justice Warren E. Burger: Well, don't we take it from the time it was born and to use your term by the signatures of the two contracting parties?

Contract speaks as of that date, doesn't it?

Mr. John G. Kennedy: Yes sir, they are true.

Chief Justice Warren E. Burger: And at that time there was a Federal Tort Claims Act.

Mr. John G. Kennedy: Very true.

Very true.

But the language was born at the time when indemnity was impossible.

So, my point is, although your point is correct, how could the Government expect it to be an indemnity clause when there was no indemnity at the time they developed it?

Chief Justice Warren E. Burger: Well it -- it could easily have gone into the contract in the abundance of caution by a Government lawyer who wanted to seal the Government off from any possible responsibility for the negligence of its contractor who might be thought by someone to be its agent.

Mr. John G. Kennedy: But it was put in with that abundance in 1938 when indemnity was possible.

And if you would like an abundance of precaution, you certainly use the word indemnify.

Now, the title -- the title to this clause is misleading.

The first sentence has nothing to do with responsibility.

It has nothing to do with indemnity.

It has nothing to do with the subject.

Only in the second sentence of this paragraph that they find, do they get to the responsibility clause and then they devote 19 words and expect this to serve as a real indemnity clause.

Justice Potter Stewart: I -- somewhere on these printed briefs or record, is there -- is the context of this clause apparent, all I have is on page 2 here in the Government's brief where they have simply the clause itself.

Mr. John G. Kennedy: Yes, I think that on page 36 --

Justice Potter Stewart: Of what?

Mr. John G. Kennedy: Of the government's brief --

Justice Potter Stewart: Thank you.

Mr. John G. Kennedy: -- you'll find the whole clause.

Justice Potter Stewart: Thank you, sir.

Mr. John G. Kennedy: It's number 11, Mr. Justice and it says, its titled Permits and Responsibility for Work.

Now, this to us is a little bit sneaky for an indemnity clause.

Justice Hugo L. Black: A little bit of what?

Mr. John G. Kennedy: Sneaky.

Nothing about indemnity, nothing in the first sentence about indemnity then they talk about responsibility in the second sentence and then they have a perfect opportunity to say indemnity.

But they leave the subject entirely.

I see I have a red light, Mr. Justice.

Chief Justice Warren E. Burger: We'll stop for lunch sir.

You may proceed, Mr. Kennedy.

Mr. John G. Kennedy: Thank you sir.

We left off when we were taking a close look at the clause, the clause that is the focus and we're making the point that it had a title which does not say anything about indemnification and it has a first sentence which lacks any words of indemnification and we submit fall short of being a real indemnity clause.

The scope of the paragraph is not indemnity.

The intention of the paragraph is not indemnity and we feel that this clause is not sufficient to require the contractor to pay back what the Government has lost as a result of its negligence.

Do you make an argument against the proposition that you are or are not liable for any part of the fault here that you're not -- that you did not contribute to the injury --

Mr. John G. Kennedy: Well, and in general --

Chief Justice Warren E. Burger: -- or that you did, which way?

Mr. John G. Kennedy: In a general sense, we pay workmen's compensation whether we are liable or not.

Chief Justice Warren E. Burger: No, no.

I didn't make myself very clear, let me try again.

Do you make that argument against the background of the claim that there was no negligence on the part of your client or do you make it against the background or it's making no difference whether your client was guilty or not guilty of any negligence?

Mr. John G. Kennedy: I think the latter would be closer.

As a taxpayer, I would certainly prefer for the Government to have included an indemnity clause, so that the exchequer would not bill out the entire $45,000.00 but we've got to accept the clause as it is.

And the clause as it is we maintain does not provide for a situation where the Government is negligent.

It's $45,000.00 negligent and wants to get it back from Seckinger, the contractor.

Now, nothing in this paragraph says a word about hold the Government on this.

That is found in a lot of indemnity clause.

It's found in a lot of leases where the owner is held harmless and if there is negligence, one party fix it up and pays the other party back.

This, we think, is a basis for the distinction between indemnity and responsibility.

There's nothing in there that says we'll indemnify the Government.

There's nothing in the heading that says permits responsibilities and indemnity.

How can it be said that this contractor when he went and signed at the place he was supposed to sign and the Government contract intended to pay back the Government for a $45,000.00 of their own negligence.

It doesn't say anything about we will pay the Government each share of damages in the event the Government is held responsible.

This would be one more sentence which would knock out argument in the head but it's not fair.

It's a mere responsibility clause.

The Government in its brief prefers to call it an indemnity.

Unknown Speaker: That was responsibility clause has been neglected?

Mr. John G. Kennedy: I think that's a -- that's a good approach.

What does this clause mean?

This clause means probably three or four things.

If our truck is going to the job and runs over somebody, we're responsible for our negligence.

If our piping is defective which we had to go in and fix, we're responsible for the negligence.

This clause becomes meaningless and ineffective only --

Unknown Speaker: Well, why would you need it -- why would do the Government have to get back from its contractor?

What does the government gain by getting a commitment limited to that, Mr. Kennedy?

Mr. John G. Kennedy: It would be hard for me to answer that but certainly the Government had reason to put it in there in 1938 when indemnity was not in existence.

Now, where the Government gets its forms or why they put them in there I don't know but certainly those two fields or situations that this clause becomes meaningful in.

And it only becomes meaningless and has no value when you try to touch it into a full-blown indemnity clause.

If you leave it alone, let it protect our plumbing, let it protect our negligence.

When we run over a truck, we run over a car, there's no problem.

Now, certainly the surrounding circumstances of this contract would be important.

The question has been raised, why didn't we turn off the power?

We are a plumber on a Marine base and we weren't about in as good a position to turn off the power as I am today to turn off the lights in this court room.

We went on there to fix the plumbing.

We weren't in-charge of the base.

Nobody gave us command of that base.

We were doing a plumbing job.

What control did we have over the operation of the base and also in this context we are really looking for the intention of the parties.

What could we have intended regarding indemnity when we merely went on that base to do one small operation.

Now, the Government brings in the Ryan doctrine and they try to reinforce --

Unknown Speaker: Now, that issue is not before us.

Mr. John G. Kennedy: Yes, it's in the briefs.

Unknown Speaker: I thought that -- I didn't understand the Government's allowing the (Inaudible).

Mr. John G. Kennedy: Well, it would please us if they were not.

We don't think it's applicable and perhaps they have adopted that position.

Unknown Speaker: I gather you litigated this in the Court of Appeals, the Ryan Doctrine?

Mr. John G. Kennedy: Yes sir.

But it was brushed aside in the Court of Appeals.

But just briefly on the Ryan Doctrine, Ryan was the employee of a stevedore who had the operation of the whole ship.

He was loading it.

He could have turned off the electricity.

He's charged with loading that ship right but the Ryan doctrine has nothing to do with this case.

Now, we can't comment specifically on the number of cases that are pending on this particular clause.

We are in no position to document the number.

We are in no position to document the amount that as is at stake.

But certainly, if contractors are required to go on to a Government installation and to indemnify the Government for it's negligence that's going to be a much higher bill for Government contracts.

The Government is urging the position that although that negligence was $45,000.00 worth and was sufficient to sustain the verdict for $45,000.00, we the contractors have to pay him back.

This is a long and hard burden for a contractor to assume.

And I don't know how many or how the dollars would work out but certainly it's arguable that it would cost the Government more money to require indemnification from this plumbing contractors and alike that go along the Government installations to do their work than it would to redraft the clause and to say in effect we expect such and such.

From all of those standpoints the matter should be considered.

This contract also puts the Government in a very involved position as far as inspecting the work.

The Government is as close to the job as the contractor and perhaps closer.

The contractor has to have a set of plans for the Government to look at.

The Government has an inspector that goes there almost daily, almost several times a day.

Justice Hugo L. Black: Just precisely what was being done in this case?

Mr. John G. Kennedy: We went on the base to fix the plumbing.

Justice Hugo L. Black: The what?

Mr. John G. Kennedy: The plumbing.

We would do an outside distribution system.

Justice Hugo L. Black: Whole system?

Mr. John G. Kennedy: Just a part of it.

Justice Hugo L. Black: Part of it.

Mr. John G. Kennedy: Part of it.

Justice Hugo L. Black: On the outside?

Mr. John G. Kennedy: Yes, sir.

Chief Justice Warren E. Burger: Was the pipe on which he was walking -- the employee was walking, one of the pipes that was being installed?

Mr. John G. Kennedy: I cannot answer that correctly.

I don't know.

There's nothing in this record, as I mentioned earlier, to show one way or the other.

In this record is the suit and the motion to dismiss and the details of it we do not know and I cannot answer it off the record because I was not in the case at that time it got started.

After all of these reasons, we feel that the District Court of the Southern District should be affirmed, they dismissed the Government's petition.

And the Circuit Court, Judge Brown, Judge Ainsworth, Judge Goldberg should be affirmed in their dismissal of the Government's petition.

Thank you.

Chief Justice Warren E. Burger: Thank you Mr. Kennedy.

Do you have anything further, Mr. Springer?

Rebuttal of James Van R. Springer

Mr. James Van R. Springer: Thank you Mr. Chief Justice, just a several small matters.

Unknown Speaker: Excuse me, am not right that the so-called (Inaudible)?

Mr. James Van R. Springer: I --

Unknown Speaker: I mean in the sense of these separate phases, extra phases of the Government.

Mr. James Van R. Springer: I think we would be willing to argue the Ryan doctrine if we thought it were necessary but I think under the situation of this case the application of Ryan principles would have nothing --

Unknown Speaker: Well my question, Mr. Springer, you haven't submitted as I understand.

The only issue we've got is the -- as I have heard is what is the meaning of the clause in the contract.

Mr. James Van R. Springer: I think to answer strictly, technically, accurately we have -- I would think preserved the Ryan theory but we do not primarily rely on it because I think anything that Ryan would give us, we say we have explicitly in this clause.

Granted and the Ryan line of cases doesn't in some sense set a background for our statement that what we say in this clause means is not extraordinary because at least in the Ryan or whatever area Ryan covers, the Government contractors have been given by implication what we say here we are entitled to by a natural reading of the clause.

Mr. Kennedy has referred to the absence of a record in this case.

Obviously, the reason there is in the record is because we haven't had the chance to make one yet.

The statements that I have made about the facts of the accident are taken from the findings made by Judge Timmerman in the earlier case in the Eastern District of South Carolina and we have lodged in connection with this case the record of that case.

And I believe that everything I've said even what I've said about what we would prove with due process really just me talking at this point since we haven't had a chance to make a record on that.

Everything that on that is at least consistent and I believe supported by testimony in the transcript of the earlier trial.

As I understand Mr. Kennedy's argument, it's primarily that this clause should not be considered as speaking for the matter of indemnity at all.

Of course then, in that respect, he departs from the view that the Fifth Circuit itself does.

I think it's plain that the Fifth Circuit regarded this as some kind of indemnity clause, it simply held that it wasn't an indemnity clause which would extend to this kind of case where the Government was negligent or also negligent but I think that Fifth Circuit agrees with us at least to the extent of saying that this is where we look in this contract if we want to know what kind of indemnity there is.

As to the historical origins of this clause, I think it is, as I understand the situation that prevailed prior to the Tort Claims Act, it is not strictly accurate to say that the Government was never subjected to tort liability.

I believe what normally happen was that Congress would pass a private bill or this has happened to a number of cases which in effect amounted to an ad hoc Tort Claims Act, giving the Court of Claims jurisdictions to adjudicate whether or not the Government should be liable, so I would think that that kind of situation could well have given rights to a situation where the Government had been held liable and would want to look somewhere for indemnity.

Justice Potter Stewart: Well, I would get other extreme claim under this language, wouldn't it?

You'd -- likely you don't have (Voice Overlap).

Mr. James Van R. Springer: (Voice Overlap) luckily, I don't have to argue that case.

Justice Potter Stewart: This appropriates money to make -- to compensate an injured party.

That's a voluntary act.

Mr. James Van R. Springer: What you said -- as I understand, the Congress ordinarily did it through a judicial proceeding.

It said, if the Court of Claims determines that the United States should be liable then the money will be paid.

Also it's true that these clauses are being as I've said earlier reconsidered and to some extent reworded from time to time.

This clause is in fact now slightly different went out materially from the way it was in 1956 when this contract was signed.

Chief Justice Warren E. Burger: But if the Government paid out money by way of a private bill after the voluntary payment in which they would have considerable difficulty asserting by way of indemnity under this clause I suggest.

Mr. James Van R. Springer: I think that may well be so, Mr. Chief Justice but a careful draftsman I think in a Government contract would at least make some effort to take that possibility.

Chief Justice Warren E. Burger: Well I --

Mr. James Van R. Springer: It count --

Chief Justice Warren E. Burger: -- suggested previously that this clause might be simply all of the unknown possibilities, its all, including the one you suggested is one possibility.

Mr. James Van R. Springer: If I was just trying to give a little more concrete content perhaps to the unknown possibilities with a careful draftsman.